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India's gold imports fell by about 32.7 per cent to USD 19.74 billion during the April-January period of this fiscal, which is expected to keep a lid on the current account deficit. Total imports of the precious metal in the corresponding period of 2015-16 stood at USD 29.31 billion.

According to industry experts, softening prices of the precious metal in the domestic and world markets could be the reason for the dip in imports. Cash crunch in the system in the wake of demonetisation also impacted the inbound shipments.

Gold imports dipped by about 30 per cent to USD 2.04 billion in January as against USD USD 2.91 billion in the same month last year, according to the commerce ministry data.

The contraction in imports helped in narrowing the trade deficit to USD 86.38 billion in April-January period as against USD 107.74 billion in the same period previous year.

India is one of the largest gold importers in the world, and the imports mainly take care of demand from the jewellery industry. For the full year 2015-16, CAD stood at USD 22.1 billion, or 1.1 per cent of GDP, as against USD 26.8 billion, or 1.3 per cent, in 2014-15.

In volume terms, the country's total official gold imports declined to 60 tonnes in April-July of this fiscal, much lower than 250 tonnes in the year-ago period. India imported 650 tonnes of gold in 2015-16.

The imports remained stable at around 100 tonnes in November despite fall in sales of jewellery due to the cash crunch following demonetisation. According to experts, the rural demand was hit due to the currency ban and restriction on withdrawal of money form banks and ATMs.

A_Gupta wrote:??? Why does GST depend on which vehicle brought the goods in?

A vertical network of businessmen can avoid paying GST collectively by claiming no credits and paying no tax. Such checks are used to catch people who do that. As seen in DeMo thread, there's no shortage of people who consider it their right to evade taxes.

There are entire industries sized in thousands of crores running completely on cash basis. Some had refused to pay even 5% VAT in past on face of the state govt. Their arrogance is seen to be believed.

These proposals were deferred for further consultation and want of more information, sources added.

Among the proposals approved, Twinstar Technologies will alone bring foreign capital of Rs 9,000 crore into the country.

GoI has been making sustained effort to bridge the demand-supply gap in pulses, but which takes time because pulses are not a fast growing crop and each new sowing takes 2-3 years to achieve full yield:Five-year map to raise pulses output

The central government has prepared a five-year schedule to push annual pulses production to over 24 million tonnes by 2020-21. This could make the country self-sufficient.

Production in 2016-17, also the first year of this plan, is expected to be a record at over 22 mt, around 0.9 mt more than targeted.

The adoption of the GST could help raise India's medium-term GDP growth to over eight per cent and create a single national market for enhancing the efficiency of the movement of goods and services, the IMF said on Wednesday.

At the same time, the International Monetary Fund (IMF) also expressed concerns over the implementation of the Goods and Service Tax (GST).

The IMF said larger than expected gains from the GST and further structural reforms could lead to significantly stronger growth, while a sustained period of continued low global energy prices would also be beneficial to India.

Noting that India's tax revenue-to-GDP ratio (at around 17 and a half per cent) remains considerably below than its emerging market peers, the IMF said the implementation of a robust GST should be a key priority given its growth-enhancing effects.

“Under-capitalized banks could be shown some tough love and be subjected to corrective action” Reserve Bank of India Deputy Governor Viral Acharya said in a speech to bankers in Mumbai on Tuesday. “Such action should entail no further growth in deposit base and lending. We must not allocate capital so poorly, recreate ‘heads I win, tails the taxpayer loses’ incentives, and sow the seeds of another lending excess.”

^^ Eventually the debt based model of economic growth is not sustainable and countries with high debt like Japan , China , US and many EU countries will start feeling the heat , infact they all do with the rise of Right Wing Nationalism in some of their country

India has potential to grow faster and plans are underway to reduce poverty and create jobs in rural areas, Finance Minister Arun Jaitley said Monday, even as he ruled out the country becoming totally ‘cashless’ immediately. “One of the reasons for note ban was tax non-compliant. One of the objectives of the demonetisation was to reduce and eliminate anonymity. I don’t see India becoming a cashless system immediately. I see India becoming less-cash economy,” Jaitley told PTI in London. The Finance Minister, who is meeting top government officials and business leaders here, further said the GST regime would also make generation of cash more difficult, besides making the taxation system much more efficient. He hoped that the GST would be implemented by July 1.

According to Agility's Emerging Markets Logistics index published last month, India, for the second consecutive year was picked as the country with the most potential to grow as a logistics market. The report, which surveyed more than 800 supply chain and logistics professionals, said GST would be the potential game-changer and companies will have to re-gear themselves to adjust to GST. Surveyed entities also indicated that India was the leading emerging market destination for investment by their companies over the next five years.

GDP numbers are stable because economic base for reporting has increased - some parts of informal economy are now entering formal economy. Original formal economy base is growing at a slower pace but this data proves the shift. One of the stated aim of demonitisation is being realised. This will improve the tax base and the banking sector. Everything is on the right track.

I thought the author was smoking something heavy..but then i saw his name and realized that he was only expressing taqleef on behalf of the ummah...and a blatant =/= attempt with STFU-P and BD..we don't survive on gelf baksheesh... this should also be posted in achievements thread as Modi is doing great things to protect the interest of indians...

eMigrate:

In May 2015, the Centre introduced a unique computerized system called “e-Migrate” to regulate overseas employment, especially to protect lesser educated blue collar workers against possible exploitation. The new system brought various stockholders -- Indian Missions, Foreign Employers, Emigrants and Recruiting Agents on a single platform. It made compulsory for the entire foreign employers to fill up a registration application which is then vetted by the respective Indian mission. Any foreign employer can raise the demand for Indian blue collar workers and seek a permit to recruit Indians only through this system.

This project has not worked in the favour of Indian workers, as Gulf-based employers, not known to be ‘tech-savvy’, have switched over to hiring laborers from Bangladesh and Pakistan. The government's intention to protect interests of Indian workers cannot be disputed but the bureaucratic procedures were bound to defeat the purpose. The bureaucracy, while preparing this system, did not realize that Gulf employers would not take so take the pain to hire Indian workers when they are available on lesser wages in other countries without any such troublesome procedures.

Minimum Referral Wages (MRW):

New Delhi made a big decision in recent years by bringing a new guideline for Foreign Employers, urging a higher pay for millions of Indian workers in countries falling under the category of “emigration check required” (ECR).

India, in this way, coerced the Gulf countries to raise the wages of its workers in a drive to earn more billions of dollars in fresh income. For instance, in Saudi Arabia, the Indian embassy lifted the recommended minimum salary to 1,700 riyals from 1,200 Riyals in the matter of a month. In the UAE, the minimum wage for some category of Indian blue-collar workers rose to 1,500 dirham from 1,200 dirham.

JTull wrote:GDP numbers are stable because economic base for reporting has increased - some parts of informal economy are now entering formal economy. Original formal economy base is growing at a slower pace but this data proves the shift. One of the stated aim of demonitisation is being realised. This will improve the tax base and the banking sector. Everything is on the right track.

Exactly . I tried to explain back in November that DeMo isn't going to cause economic contraction as far as the official economy is concerned but the opposite, due to black to white conversion . There will probably be even more tailwinds in the current and future quarters as more data is accounted for .

Whenever an economist makes a judgement call., never trust that eCONomist. For example., all eCONomists jumped and predicted that India's GDP growth rate will shrink by as much as 2%., and some #mediapimps went to the town stating that India's GDP will shrink!

Now this same eCONomists are taking a rain check by making the following statement:

Little surprise, then, that Tuesday's robust GDP figures have left economists dazed, and have also raised fresh doubts about the quality of India's official economic data reporting.

"Perhaps this data is not capturing the impact of demonetisation," said Aneesh Srivastava, chief investment officer, IDBI Federal Life Insurance Co.

"I am totally surprised and stunned to see this number."

*

So if the number is against your bias., then the numbers are wrong! Aren't economists supposed to be objective? Hence a subjective economist is more a eCONomist!

And this is outright ridiculous

"There are widespread doubts about the accuracy of the national accounts numbers," analysts at Capital Economics wrote. "The unexpected strength of today's data will do nothing to allay these concerns."

The Reserve Bank of India (RBI) left the policy repo rate on hold at 6.25 per cent for a second meeting in a row this month and signalled an end to its longest easing cycle since the global financial crisis, citing growing inflationary risks.

"With inflation pressures also building, we think that the RBI could begin hiking rates over the next 12-18 months," analysts at Capital Economics wrote in a note.

A tougher rate policy means that the quality of investment will be better and hence the investment has a better chance of weathering a downturn instead of looking at handouts from the tax payer. Further., in case of India (or the world over) the NPAs can be balanced out.

These guys seem to be idiots, a fact which neatly explains why most of their funds and policies turned out to be underperformers. I already planned to liquidate mine in a couple of months, and endorse your suggestion fully.

Annual gross domestic product (GDP) growth for the October-December period came in at 7.0 per cent, a tad slower than 7.4 per cent in the previous quarter but much faster than the 6.4 per cent expansion forecast by economists in a Reuters poll.

It was also higher than China's 6.8 per cent growth for the last three months of 2016.

Gross domestic product (GDP) for the third quarter (Q3) of financial year 2016-17 (FY17) grew at 7 per cent, allaying fears of any major effect of demonetisation though it was the lowest expansion in four quarters.

Private final consumption expenditure, denoting demand, rose at double the rate (10 per cent) in Q3, against five per cent in Q2.

The Q3 numbers not only made India the fastest-growing large economy in the world but also helped the Central Statistics Office (CSO) retain its earlier projection (in first advance estimates) for full-year GDP growth at 7.1 per cent in the second advance estimates released on Tuesday.

“It appears like the negative impact of demonetisation was over-estimated. India still maintains a 7-per cent growth rate and remains one of the brightest spots in the global economy,” Economic Affairs Secretary Shaktikanta Das told Business Standard after data was released.

“The biggest surprises in GDP growth figures for Q3FY17 were the 8.3-per cent manufacturing growth and the 2.7-per cent rise in construction activities. The latter was expected to have been affected by cash crunch,” said Aditi Nayar, principal economist, ICRA.

She added, “The higher-than-expected growth can be ascribed to agriculture as well as each sub-sector of industry. Service sector growth is weaker than anticipated.”

JTull wrote:GDP numbers are stable because economic base for reporting has increased - some parts of informal economy are now entering formal economy. Original formal economy base is growing at a slower pace but this data proves the shift. One of the stated aim of demonitisation is being realised. This will improve the tax base and the banking sector. Everything is on the right track.

Exactly . I tried to explain back in November that DeMo isn't going to cause economic contraction as far as the official economy is concerned but the opposite, due to black to white conversion . There will probably be even more tailwinds in the current and future quarters as more data is accounted for .

How much of the 7.1 growth is because of hitherto unreported activity started being reported because of DeMo? Did any part of the formerly informal activity started appearing in the GDP figures? If we compare apples to apples, what would the growth have been if we take into account only that activity that was being reported?

If we take MMS estimates of 5.5 GDP growth as correct and 7.1 is because of underground economy coming over ground, then 1.6% is the size of the informal economy that was reported last quarter. When all of the hidden economy starts getting reported, will we see a quarter/year with 20-30% growth rate?

That's difficult to answer. To put the question back to you, how much clarity do you think exists in production and sales data from the field ? For example a company that usually reports 10% growth reports 25% last quarter. How much of that is necessarily informal ? It's not easy to tell them apart from the source trail perspective. You could assume anything above trendline is anomalous, but that's just an estimate.

In general Q3 data is going to be very noisy to look at because there's a combination of destruction of cash-based economic networks and a rebuilding of formal banking based systems in its place, and what we see is the net growth alone. The claim so far had been that the losses on account of the disruption would significantly exceed gains, at least in the short term. That's clearly not true - the economy was resilient enough to sustain the effect of DeMo without losing its overall momentum.

It is indeed possible that there will be future quarters of high growth. 20-30% though ? Unlikely. It's more likely that CSO will receive data that doesn't fit into its base year model anymore and they'll just update the base year and scale up the GDP by 20-30% to account for the greater base of activity taking into account informal activity that became formal.

Asia’s third-largest economy is being weighed down as the soured loans on bank balance sheets hinder credit growth and job creation. Various schemes proposed by the central bank to resolve the problem have been unsuccessful with lenders reluctant to write down assets sufficiently and company owners unwilling to negotiate repayment plans.

Stressed assets -- made up of bad loans, restructured debt and advances to companies that can’t meet servicing requirements -- have risen to about 16.6 percent of total loans, the highest level among major economies, data compiled by the government shows.

The resolution process for bad loans has been delayed as the current tools offered by the RBI are inadequate and lenders have recently been focused on dealing with the fall out from Modi’s cash ban, Bhattacharya said.

The RBI completed its audit of the nation’s 50 lenders last year, forcing them to lay bare previously-hidden nonperforming loans. Credit Suisse Group AG estimates banks will have to put aside at least 860 billion rupees ($13 billion) in the next 12 months to comply with higher central-bank requirements for older soured debt.

“We believe in another four months time you will see these resolutions happening and if that happens then, definitely, I think we can declare the clean-up process will have served its purpose and be over,” Bhattacharya said.

S&P Global Ratings said Tuesday that India’s banks will recover only marginally over coming quarters, citing a reluctance by the corporate sector to invest and a ’wait and watch’ approach by retail borrowers. Weak profitability and rising capital demands will also weigh on public sector banks, the ratings firm said.

A private survey signaled the first expansion in four months for India’s key service sector, adding to signs the economy is bouncing back from Prime Minister Narendra Modi’s shock clampdown on cash late last year.

The Nikkei India Services Purchasing Managers’ Index inched up to 50.3 in February, a report showed Friday, from 48.7 in January and November’s 46.7, which was the lowest since December 2013. A number above 50 indicates growth.

"Anecdotal evidence from survey participants suggested that, after being hampered by shortages of cash in the economy, demand for services in India improved," the report said.

the big short-term challenge is the disturbing weakness of investment. The Economic Survey attributes this in part to the “twin balance sheet problem” — the combination of overleveraged companies with encumbered banks. It argues that the economy will not grow out of these debts, partly because they hinder investment and growth. The answer is a combination of recognising losses, restructuring debts and radical reform of banking. This will be difficult but it is surely essential.India has a good chance of enduring as the world’s fastest-growing large economy, ultimately emerging as another democratic superpower by the middle of the century. But the challenges it faces are enormous. Past successes suggest these might be overcome. But much will have to change and many of those changes will not happen automatically. Once again, India has a tryst with destiny.

Contrary to market perception, India’s unemployment rate halved from 9.5 per cent in August 2016 to 4.8 per cent in February this year

unemployment rate in Uttar Pradesh registered the maximum decline from 17.1 per cent to 2.9 per cent, followed by Madhya Pradesh (10 per cent to 2.7 per cent), Jharkhand (9.5 per cent to 3.1 per cent), Odisha (10.2 per cent to 2.9 per cent) and Bihar (13 per cent to 3.7 per cent).

The report claims the reduction in unemployment is primarily due to MNREGA. Though good, not necessarily the best way.

The report further noted that the decline was also explained by household demanded/allocated work under MGNREGA, which increased from 83 lakh households in October 2016 to 167 lakh households in February 2017.

hanumadu wrote:The report claims the reduction in unemployment is primarily due to MNREGA. Though good, not necessarily the best way.

The report further noted that the decline was also explained by household demanded/allocated work under MGNREGA, which increased from 83 lakh households in October 2016 to 167 lakh households in February 2017.

These were in the most drought affected regions or in areas with the least economic dynamism . A doubling in households covered through a far lower increase in spending indicates that the program is far more effectively run now. A lack of destitute voters also increases the appeal of developmental politics since the focus shifts to desire for growth, from being willing to grab whatever scraps are sent their way .

To me the impressive factor is the household coverage. a 2x increase in coverage amounting to almost 8 million new households in ONE year ? Keep in mind we have ~200 million total households, i.e. a ~5.5x multiplier to # of people. In one year the effective implementation of this kept 45 million rural people out of the destitute/unemployed ranks by giving them gainful employment and hopefully skills to build upon. That's a huge achievement. On the other hand, it also means that this program backstops almost 10% of households, which is a very large number too.

^^ It basically means that the rural poverty is wiped out. They may not have white goods or even bicycle., but at the very least they will have food+clothing. I think the push for rural housing and textiles will in next five years solve the issue of roti+kapda+makan.

Real garibi hatao! And all this on a backdrop of falling inflation. I am still trying to digest the numbers., but if this year's monsoon is also good - then we will be set for goldilocks growth for the next 2-3 years! Another couple of good monsoons and we will be in goldilocks till 2024!!

Key points:* Initial estimates show 16.4 million farmers opt for insurance under Pradhan Mantri Fasal Bima Yojana in this rabi season* Of the total cropped area of 64.5 million hectares, the total area covered is around 19.4 million hectares* The total sum insured rose by almost 50 per cent to over Rs 68,000 crore, as compared to the same period last year * The government plans to cover 40 per cent of cropped area in 2017-18 and raise it to 50 per cent by 2018-19* In the 2017-18 Union Budget, the government allocated Rs 9,000 crore for the scheme as against Rs 5,500 crore allocated in 2016-17 (BE)

Foreign investments in the services sector increased 77.6 per cent to $ 7.55 billion in the first nine months of the current fiscal, helped by government steps to improve ease of doing business.

The sector, which includes banking, insurance, R&D, outsourcing, courier and technology testing, had received foreign direct investment (FDI) worth $ 4.25 billion during the April-December period of last fiscal, 2015-16, according to the Department of Industrial Policy and Promotion (DIPP).

The sector contributes over 60 per cent to India's GDP and accounts for 17 per cent of total foreign investment inflows.

The other sectors where inflows have recorded growth during the nine month period of 2016-17 are: telecom ($ 5.54 billion), trading ($ 2 billion), computer software and hardware ($ 1.81 billion) and automobile ($ 1.45 billion).

In step FDI growth in important sectors like services, overall foreign inflows in the country increased 22 per cent to $ 35.84 billion during April-December 2016-17.

Gold imports by India, which competes with China for the role of world’s biggest consumer, are said to have risen almost three-fold in February from a year earlier as jewelers increased stockpiles before the festival and wedding period that starts next month.

Shipments jumped 175 percent to 96.4 metric tons in February from a year earlier, according to a person familiar with provisional data from the finance ministry, who asked not to be identified as the data aren’t public.

American agency Fitch Ratings on Tuesday expressed surprise at the official Indian statistician's latest projection of 7 percent GDP growth in the third quarter ended December, saying it contradicted data on real services activity hit by demonetisation.

"This number looks somewhat surprising as real activity data released since demonetisation pointed to weak consumption and services activity because these transactions are cash-intensive. By contrast, official data suggest that private consumption was strong in October-December (though services output growth moderated quite substantially)," Fitch said in its latest Global Economic Outlook (GEO) report.

The rating agency said that an explanation for this discrepancy could be the inability of official data to capture the negative effect of demonetisation on the informal sector.

"However, the formal sector also remained surprisingly robust. This raises the possibility that these initial estimates of the growth impact of demonetisation could well be underestimated, with the possibility of revisions to official GDP data later on," the report said.

"Fitch now expects Indian GDP to grow by 7.1 percent for FY16-17, before picking up to 7.7 percent in both FY17-18 and FY18-19," it added.

The Modi government will unleash the next set of reforms necessary for improving the ease of doing business by pressing for the passage of the twin codes on wages and industrial relations that form the crux of its agenda for reducing labour market rigidities. Official sources told FE that both the codes, which have already undergone legal vetting, would be taken to the Cabniet soon for approval and once it is secured, placed in Parliament, most likely in the second half of the budget session.

Among the major proposals are introducing fixed-term employment – which was made applicable in the textile and garment industries last year – in all the sectors, allowing units employing up to 300 people to retrench/lay off workers and/or close down without government approval, making trade unions with negotiating powers more representative, barring outsiders from being office-bearers of unions in the organised sector and reducing such persons’ role in union activities in the unoranised sector. Also, an industrial strike would be defined afresh by including concerted casual leave by 50% of more workers while the provision for prior notice of strike would be extended to “all activities similar to existing public utility services”.

The extension of fixed-term employment to all sectors would help generate fresh jobs and thus, could be a win-win for both the workers and employers, analysts said.

But but ...

However, trade unions are opposed to this, calling it a backdoor entry for the hire-and-fire policy. Last year, the government made it mandatory for units in the textile and garment industry to treat a fixed-term worker on par with a permanent worker in terms of working hours, wages, allowances and other statutory dues. The emulation of the policy by all the other manufacturing and service industries, would help address the current stagnation in job growth and generate “decent employment”, government sources said.

Focus on workers' rights and plights ...

The government proposes to increase the severance compensation in case of retrenchment or closure from 15 days’ wages now to 45 days’ wages for every completed year of service. However, such compensation won’t be available to those recruited for fixed-term employment.

As these steps are regarded as industry-friendly, the proposed codes also seek to enhance the workers’ privileges. The code on wages, for instance, proposes making minimum wage a statutory right and extending it to all employees – currently the relevant Act applies to 51 “scheduled employments” only. In what is expected to reduce the disparity in minimum wages across states, the central government will notify a “national minimum wage” (below which no state can fix their minimum wages) and this will be revised every two years (five years if the dearness allowance becomes part of the minimum wages). Also, the changes proposed in the Payment of Wages Act will ensure payment of wages to all in time and mostly to the bank accounts. Besides, the maximum wage for computing bonus will be “Rs 7,000/month or the minimum wage whichever higher” against the Rs 7,000/month now.

And a tie-in with a larger policy framework that includes elements such as the new bankruptcy code ...

By allowing larger units to lay off workers sans the government nod, the policymakers are aiming at a more efficient unlocking of investments and easier exists for industries, which is also buttressed by the new bankruptcy code. While the government proposes to bar outsiders from being office bearers of trade unions in the organised sector to preclude undesirable interference, in case of trade unions in the unorganised sector, the number of outside office bearers would be restricted to two, or 25%, of the total office-bearers, whichever is less, from 50% of the office-bearers at present.

The proposed codes also provide for a greater facility for skilling of workers and resolving trade union disputes.